LeapFrog 2006 Annual Report Download - page 159

LeapFrog, Mr. Chiasson’s employment is terminated for reasons other than cause or by Mr. Katz for good
reason, we would pay Mr. Chiasson (a) a lump sum equal to 12 months of his then current base salary, (b) any
bonus to which he would have been otherwise entitled in the year of his termination, and (c) reimbursement of
health insurance benefits for him and his dependents until the earlier of the conclusion of the 12-month period
following the date of his termination and the date on which Mr. Chiasson becomes eligible for group health
insurance benefits from a subsequent employer. Assuming a termination date of December 29, 2006 where these
change-in-control benefits are triggered, the salary plus bonus severance payment would be equal to $457,500
and the health insurance payment would be up to $13,996. For purposes of the foregoing discussion, a
change-in-control transaction will be deemed to have occurred if any person or entity (other than Lawrence
Ellison, Michael Milken, Lowell Milken or any combination of the foregoing) acquires at least a majority of the
combined voting power of our outstanding securities, or upon our merger or consolidation, adoption by our
stockholders of a plan of dissolution or liquidation or the sale or transfer of substantially all of our assets.
Release
Mr. Chiasson is required to execute a release prior to receiving any of the foregoing benefits.
Michael J. Dodd
Termination
Mr. Dodd will be entitled to certain benefits if his employment is terminated by us for reasons other than
cause. Upon such a termination, Mr. Dodd would be entitled to receive (a) an amount equal to six months of his
base salary, (b) on our customary bonus payment date, a prorated portion of his bonus for the year in which his
termination occurs, and (c) reimbursement of health insurance benefits for the six-month period following the
date of his termination (the “Dodd Severance Benefits”). Assuming a termination date of December 29, 2006, the
salary plus bonus severance payment would be equal to $382,500 and the health insurance payment would be up
to $5,261.
A termination other than for cause shall mean the termination of Mr. Dodd’s employment for any reason
other than his (a) conviction of any felony crime involving moral turpitude or dishonesty, (b) participation in any
fraud against us, (c) material breach of his duties to us, including persistent unsatisfactory performance of job
duties, for a period of 30 days following receipt of written notice from us regarding such failure, (d) intentional
material damage to any of our property, (e) willful misconduct that is demonstrably harmful to us or (f) material
breach of any agreement with us.
Change-in-Control
If, within 12 months following a change-in-control, Mr. Dodd’s employment is terminated for reasons other
than cause or by Mr. Dodd for good reason, we would accelerate the vesting of any stock options then held by
Mr. Dodd by an additional 12 months. The value of this additional vesting, assuming a change-in-control
occurred on December 29, 2006, would be $3,281. We would also pay to Mr. Dodd the Dodd Severance
Benefits, as applicable. For purposes of the foregoing discussion, a change-in-control transaction will be deemed
to have occurred if any person or entity (other than Lawrence Ellison, Michael Milken, Lowell Milken or any
combination of the foregoing) acquires at least a majority of the combined voting power of our outstanding
securities, or upon our merger or consolidation, adoption by our stockholders of a plan of dissolution or
liquidation or the sale or transfer of substantially all of our assets. A termination by Mr. Dodd is for good reason
if it occurs within 60 days of any of the following events: (a) removal from his position as Senior Vice President,
Supply Chain and Operations unless the removal occurs solely as a result of a merger into a larger entity such
that he retains the same authority for operations that are substantially identical to our previous operations, (b) any
material diminution of his role, responsibilities and authority unless the diminution occurs as a result of a merger
into a larger entity such that he retains the same role for operations that are substantially identical to our previous
operations, (c) reduction of his then current base salary, unless the base salary of our other senior level executive
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